Today I am bringing you the final post in my five part series where I have explained the various methods available to wholesale REO deals and get around the “No Assignment” clause that most banks include in their addenda.
Using a Land Trust to Wholesale
In this post I will be talking about using a Land Trust to get your REO wholesale deals to the closing table. This strategy is similar to the LLC method that I discussed in last week’s post; in both instances, you will not be selling the actual property to your end buyer, but rather, the LLC or the Land Trust which owns the contract to purchase the property.
If you decide to wholesale your deals in this manner, you will be making your offer to the bank in the name of a Land Trust (which you will create once your offer has been accepted), and signing the offer as the Trustee of the Land Trust.
Once you have located an end buyer for your deal, you will be assigning your beneficial interest in the Land Trust to them in exchange for your agreed upon wholesale fee. Your end buyer will then bring the funds for the purchase of the property to closing, along with your fee.
Once the closing has taken place, your buyer (who is now the beneficiary of the Land Trust which owns the property), will fire you as the Trustee and appoint another.
Just like the LLC method that I described last week- when using a Land Trust to wholesale your REO deals, there is only one transaction taking place, so you will only have one set of closing costs to deal with.
The paperwork required to close deals in this manner is going to vary depending upon which state you are in, so you will want to consult with a local real estate attorney and have them prepare the necessary documents for you to ensure that you are properly protected in the transaction.
Whether you decide to close your REO wholesale deals using a Land Trust or one of the other strategies I’ve discussed over the course of the last five weeks, I recommend that you make this decision before you start offering on properties. Doing so will make your life much easier once you start getting deals under contract.